Digital detectives grilled on missing evidence

Jessica Mintz, Associated Press

Published
4:00 am PST, Monday, February 16, 2009

Guidance Software Inc. bills itself as the leading provider of technology that helps companies dig up old e-mails and other electronic documents that might be evidence in a lawsuit. Yet when Guidance itself had to face a judge, it was accused of bumbling its internal digital search.

Whether Guidance intentionally hid documents or just couldn't find them is a matter of dispute. The company said it did all that was required. But its inability to cough up certain e-mails, even over several months, led an arbitrator to accuse it of gross negligence and bad faith.

The mountains of digital information piling up on hard drives and backup tapes have made discovery - the exchange of information between parties to a lawsuit - increasingly complex. E-discovery software and services boomed from a $40 million business in 1999 to nearly $2.8 billion in 2007, according to the industry group Electronic Discovery Resource Model.

Guidance Software of Pasadena is one of the largest software specialists, with sales of $89 million over the last four quarters. The company began in 1997 making tools to help criminal investigators search computer hard drives. It recently added programs for scouring corporate networks for digital evidence.

Guidance needed to use that expertise in a case involving its former marketing director, Cassondra Todd.

Todd believed Guidance's chairman pressured her manager to fire her, in part because she is a woman. After she got a scathing performance review in 2007, she asked for an investigation.

"I was quite confident that whatever information was produced would wipe clean what was going on," Todd said in an interview.

But Guidance told Todd it found no evidence of discrimination. It apologized for the harshness of the review but wouldn't delete it.

Todd hired Arnold Peter, an attorney with Raskin Peter Rubin & Simon in Los Angeles. A few weeks later, she was laid off and she filed a wrongful-termination claim. Both sides were required to hunt for documents.

Todd expected to see far more e-mails from her days in the company. But she couldn't argue Guidance was holding back - intentionally or not - until she got a break a few months later.

Tim Leehealey, Todd's first manager at Guidance and now the head of a rival company, had printed and saved some memos from the time of Todd's bad performance review. When Todd reviewed his stash, she found e-mails about her that Guidance hadn't turned over.

"Those documents were on people's hard drives for sure, and they didn't produce them," said Leehealey.

The arbitrator handling Todd's case, a retired judge, ordered Guidance to do a more thorough search. The company said that one of its e-mail backup tapes had been corrupted. The arbitrator lost patience.

Ultimately, the arbitrator found enough information to decide in Todd's favor. He awarded her more than $300,000, about twice her annual compensation. A federal court is also set to consider whether Todd should receive damages under separate laws that prohibit discrimination.

Guidance was "egregiously in violation of everything they report to be best practices," Todd says. "They had every resource at their disposal. They didn't want to take it seriously."